Cambridge Global Asset Management  

Our Philosophy

Investment Philosophy

Each pillar of Cambridge’s investment philosophy was conceived to help compound client wealth over the long term. It dictates how the team operates, what it stands for and what differentiates Cambridge from the competition.

The three pillars of investment management at Cambridge are:

1) True active management
The mutual fund industry has over expanded over the last 20 years and compensation practices targeting relative returns have led to a divergence between portfolio manager goals and investor interests. This misalignment and relative focus has caused funds to look more and more like the index. Cambridge’s portfolios are constructed using a bottom-up approach, while providing diversification across sectors and, where appropriate, asset classes and geographies. The team does not manage to a benchmark but rather combines the best opportunities given the mandate of a specific fund. This results in a very high active share compared to many peers. As active share is the percentage of a portfolio that is different than the underlying benchmark, a high active share provides opportunities for outperformance. This is based on the fact that the only way to outperform an index is to be different from it.

2) Focus on downside protection and absolute returns
Cambridge understands that wealth creation is a marathon and not a sprint. It is about consistently compounding value over time, not beating an arbitrary benchmark over a calendar period. Because all investing comes with risk, Cambridge’s research process is heavily geared towards making sure the funds are being adequately compensated for taking risk. When Cambridge is not finding appropriate risk/reward opportunities in the market, the funds hold cash.

3) Manager alignment
A key part of Cambridge’s analysis of a company is determining management compensation and alignment. Cambridge has long believed that owners make better decisions than managers. As a result, the team tries to identify those companies and management teams whose wealth and compensation are tied directly to driving shareholder value creation over time. Intuitively this makes sense; when Cambridge entrusts a company’s management with clients’ capital they want to make sure that management’s motivations are aligned with those of shareholders. This element of Cambridge’s investment philosophy extends to Cambridge itself: Compensation of team members is linked to the performance of their funds, and the vast majority of their individual wealth is invested in the funds – alongside that of Cambridge’s clients.

Cambridge believes the combination of true active management, a focus on downside risks and personal alignment create an environment that can deliver strong long-term, risk-adjusted returns for clients.

The terms “value” or “growth” are often used to define an investment philosophy, but Cambridge does not believe either label encompasses its approach. The team often finds many traditional value stocks expensive and many growth stocks cheap. Cambridge’s focus is not simply on a valuation multiple or growth rate but rather the value a business can generate and what price the team is paying for it. The quality of the business model, growth potential and a number of other considerations factor into the valuation of a business.

 

We are focused on achieving absolute returns.
We will hold cash to take advantage of volatility and protect capital.

 

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Cambridge Global Asset Management is a division of CI Investments Inc. Certain funds associated with Cambridge Global Asset Management are sub-advised by CI Global Investments Inc., a firm registered with the U.S. Securities and Exchange Commission and an affiliate of CI Investments Inc.
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